PIC CEO Elias Masilela. Picture: ROBERT TSHABALALA
PIC CEO Elias Masilela. Picture: ROBERT TSHABALALA

THE Public Investment Corporation (PIC) said on Wednesday that its management and investment committee had decided unanimously not to support the offer by Chile’s largest drug company, CFR Pharmaceuticals, for South Africa’s Adcock Ingram.

The PIC holds 18.6% of Adcock, the country’s second-largest pharmaceutical group, which said last week the deal already had the support of 45% of shareholders.

For the deal to succeed, more than 75% of shareholders must agree.

In a statement, PIC CEO Elias Masilela said: "CFR recently made a non-binding offer for Adcock Ingram, which was subsequently recommended by the Adcock board to shareholders. Due to its non-binding nature, the terms of the offer cannot be considered to be final, with some of them still uncertain.

"The PIC has considered the CFR proposal based on the current terms and available information, specifically taking a long-term view on our investment in Adcock."

CFR made a R12.6bn cash and shares offer for the local drug maker in July this year.

Several of Adcock’s shareholders have gone to Chile to meet CFR executives, and some even had to recommit to their irrevocable support undertaking as the period has lapsed.

While the CFR deal has taken longer than many expected to put together, the Chilean company has already cleared several potential stumbling blocks.

It has obtained agreements with Adcock’s Swiss partner Baxter Healthcare on the continued licensing and supply of the South African company’s hospital products, which was one of the major factors that stopped Brian Joffe’s Bidvest from making an offer earlier this year. CFR has also reached a deal with Adcock’s black empowerment partner.

CFR is 73% controlled by the family of CEO Alejandro Weinstein, and is Chile’s biggest pharmaceuticals company.

With Adele Shevel